Over 40 and Worried about Money? Start here!

And by over 40, I mean I’m on the down slide to 5……nope, can’t quite type that number just yet.

I really am enjoying this decade though. I’m busy raising my daughters with my 50-something husband, managing our small business, and writing my blog. After I hit 40, I took up long distance running to stay fit, something I never considered in my 20’s or 30’s.

But I realize that it’s not all rainbows as retirement years aren’t that far away.

I’m part of the generation that still views retirement in traditional terms. You work until you are 65 and then retire.

It’s a very different view from what I see with many millennials today. Many are thinking outside the box. They’re taking a gap year between high school and college. And in adulthood, they are stashing their incomes and living hyper-frugally to save for early retirement, instead of waiting to 65 to fulfill their dreams.***

I envy their position, but that gets me nowhere!

My generation, Generation X (born 1965 – 1984), and those before it were told to toe the line. Go to school. Get a job. Work for the same company for 35+ years. And then at the end of the rainbow, you retire, and move to Florida.

Recently on Facebook, I shared a beautiful picture and tagged my husband, “Jeff, let’s retire HERE.” I received many likes, but sadly a high school friend commented, “Retire? Is that possible?”

Her comment was echoed by another (in real life) conversation I was having with a different friend who is sending a child off to college this fall. The cost of college education is crushing and many parents feel compelled to assist or pay for the entire tuition. This leaves not much left to save for retirement.

I have real concerns for my generation. A fair amount of Gen Xers feel that retirement sounds like a nice concept, but is hardly achievable. Another friend chimed in, “we’ll never stop working, retirement isn’t possible.”

Recently Go Banking Rates conducted two studies on savings rates with startling results.

• Almost 70% of Generation X have less than $1000 in personal savings account. *
• 29.8% of Generation X report a retirement savings account balance of $0.**
• 21.9% of Gen X report they have saves less than $10,000 for retirement.**

My friends in the over 40 set, we MUST change this.

I know there are many reasons for the dire savings rates: kids, household projects, kids, pets, kids, caring for an aging parent, kids, medical issues, and kids. But we must change these statistics.

And that’s where we get stuck. It’s all too much. I hear people say, “how am I supposed to save for retirement AND raise my kids, save for their college, AND still enjoy the present moment?”

I hear you. It is a lot. We’re struggling with it all too. But for our own safety net, we must make our finances a priority.

5 Strategies to get Started:

1.  Write down your dreams and plans.

There is a saying that a “dream is just a wish without a plan.” Sit down and start laying out your dreams. (If you’re married, you MUST do this with your spouse.) Write these dreams down on paper.

Years ago, my husband and I sat down and created our life plan. We charted out our course of action to pay off debts and start saving for retirement. We still refer to it often to remind ourselves of our goals and objectives. The plan hangs on our refrigerator. There are days I want to rip it to shreds, because of frustration. It’s taking forever for us to accomplish the step we’re on (paying off our non-mortgage debt), but we keep plugging away.

2. Determine your current financial situation.

It’s hard to change and improve your finances if you have no idea where you currently stand. Use my Family Balance Sheet excel spreadsheet to help you organize your finances. It’s FREE when you sign up here for my weekly newsletter. I’m on this journey to financial wellness with you and every weekend, I pack the newsletter with budgeting inspiration, money-saving tips & ideas, and frugal, yet tasty recipes.

3. Read. Read. And Read some more. A few of my favorite personal finance books:

• The Total Money Makeover: A Proven Plan for Financial Fitness, by Dave Ramsey
• Financial Peace Revisited, by Dave Ramsey
• Retire Inspired: It’s Not an Age, It’s a Financial Number, by Chris Hogan

4. Find a Financial Professional you can trust.

I am not a financial professional and you don’t have to do this alone. Find a trusted financial professional to help you navigate through the many long term investing and retirement options available. Finding a professional can be overwhelming, but Dave Ramsey just launched SmartVestor, a free resource to help you find an investing professional. Although I have not personally used this resource. I heard him announce this launch on his show, but it might be a good place to start.

5. Start Saving for your Emergency Fund TODAY!

If you are part of 70% of Generation X that has less than $1000 in personal savings account, start saving today for your emergency fund, whether it is the starter $1000 emergency fund that Dave Ramsey promotes, or it is 3-6 months of expenses.

We had a very tough year back in 2007. I remember one morning my husband and I were sitting at the kitchen table contemplating if we should sell one of our cars. It was a very scary time and I wouldn’t wish that on anyone.

Our saving grace was the money we had saved in our emergency account. If not for that fund, we would most likely have used credit cards to survive. We reduced our spending where we could that year, but the money to pay any shortfall each month came from our emergency fund. That emergency fund saved our business, our sanity, and our marriage.

Don’t know how or where to start?

Read: How to Build your Emergency Fund   and   25 Ways to Find Money for your Emergency Fund

Where We Stand

A few years ago, we were struggling financially and I felt like our situation was hopeless. At the time, I wasn’t sure how we were going to pay our monthly bills, so future plans like funding our retirement, our daughters’ college education, or a lavish vacation were not on my mind.

We needed to put together a financial plan before the ship sank. My husband and I took Dave Ramsey’s Financial Peace University home course and we wrote Our Debt Freedom Plan based on Dave’s 7 Baby Steps. We are self-employed small business owners and felt we needed to adapt his baby steps slightly to include our business. Our personal finances are so interwoven with our small business finances that they must be seen as one.

Our current priority is to pay off our last non-mortgage loan (our step 4). We have completely stopped any retirement contributions, so we can apply that money towards our debts (we had A LOT).

In 2015, we crushed quite a bit of debt and started 2016 with momentum to continue and possibly pay off this last debt by the end of the year and start contributing to retirement again. But after January, this year has turned out to be one obstacle after another. We’ve had many unexpected expenses at our business and at home that have cost a lot of money leaving us little left to put towards our debt snowball.

These expenses have set us back several months, but the good news is that we paid cash for everything without resorting to using a credit card or loan. The bad news is that we are still not contributing to our retirement savings.

Honestly, this year has us feeling disheartened, discouraged, and at times, broke. We had so much momentum, and are fighting every day to get it back!

Where do you stand?

This post is meant to INSPIRE, not discourage. I LOVE my generation. I’m proud to be over 40–I’ve earned these wrinkles–but we need to come to terms with our balance sheet. Please know that YOU are not alone. And we will get through this together!

Are you over-40 and concerned about your current and future finances? Please share your thoughts and concerns in the comments. We’ll work through this over-40 stage together.

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Sources: *, **. *** don’t believe me about millennials retiring early, check out FrugalWoods.